Overview

Experienced, Effective Representation in Tax Controversies

Our tax litigators come from a variety of backgrounds, including many with experience as government counsel representing the State of Minnesota and federal taxing authorities. Lead attorneys in the group include Steve Kaplan, formerly a trial attorney of the U.S. Justice Department Tax Division; Tom Muck, formerly chief litigator for the Minnesota Department of Revenue; and Sue Ann Nelson, formerly a senior trial attorney with the Office of Chief Counsel, Internal Revenue Service, in St. Paul, Minnesota. They also include Tom Wilhelmy, who is certified as a Real Estate Specialist by the State Bar Association and brings more than two decades of experience in property tax litigation.

We represent publicly-owned and privately-held corporations, partnerships, cooperatives, individuals, and fiduciaries in tax disputes and litigation of all types against the Minnesota Department of Revenue, the Internal Revenue Service and the Department of Justice Tax Division. Our clients are well-recognized national, regional and local businesses. We regularly negotiate and litigate tax disputes involving, for example, corporate and personal income taxes, sales tax, estate and gift tax, employment taxes and property taxes.

We offer full‑service representation at every stage of the tax controversy process, be it the agency examination or appeals process, the trial court, or, if necessary, on appeal. Frequently, our early involvement at the examination or protest stages permits us to help the taxpayer marshal the critical underlying facts and to define the arguments most likely to prevail. In addition, we bring the benefits of attorney‑client confidentiality and privilege to the controversy.

When litigation is advisable or necessary, we draw upon our trial experience to choose the appropriate court, develop the case through formal and informal discovery, and aggressively advocate the taxpayer's position before the judge or jury. Our tax litigators have extensive experience in the federal district court for the District of Minnesota, the United States Tax Court, the Minnesota Tax Court, the Minnesota District Courts, the Eighth Circuit Court of Appeals, the Minnesota Supreme Court, and the Minnesota Court of Appeals. We know tax law, but more importantly we have the experienced advocate's ability to develop and present the most persuasive arguments and themes.

Throughout our representation, we strive to obtain fair and thoughtful review of the dispute to achieve the best possible result for our client at the earliest opportunity.

Representative Cases

Federal Tax

• Astleford v. Commissioner, T.C. Memo 2008-12 (gift tax case involving valuation of gifts of interest in a family limited partnership - three tiers of discounts approved by court).
• Xcel Energy Inc. v. United States (D. Minn.) (tax treatment of leveraged company-owned life insurance plan).
• O’Shaughnessy v. Commissioner, 332 F.2d 1125 (8th Cir. 2003) (multi-issue litigation involving, inter alia, depreciation, abandonment loss, and change of method of accounting issues for glass manufacturing company).
• Northern States Power Company v. United States, 151 F.3d 876 (8th Cir. 1998) (multi-issue income tax case involving, inter alia, placed in service date for nuclear fuel assemblies and change of method of accounting questions).
• U.S. Sprint Communications, Ltd v. Comm'r, 578 N.W.2d 752 (Minn. 1998) (dispute over whether federal telecommunications excise tax that taxpayer collects from its customers should be included in “sales price” and taxed by the Minnesota sales tax).
• Northern States Power Company v. United States, 73 F.3d 764 (8th Cir. 1996) (multi-issue income tax case, including an "interest netting" dispute).
• O'Hagan v. United States, 95-1 USTC 50,082, aff'd, 96-1 USTC 50,311 (8th Cir. 1996) (injunction action against IRS to restrain levy on homestead).
• O’Shaughnessy v. United States, 517 N.W. 2d 574 (Minn. 1994) (federal tax lien held unenforceable against assets of discretionary trust).
• Landmark v. U.S., 25 Cl. Ct. 100 (1992) (first case in the country to hold that cooperatives are not subject to the deduction limitations of I.R.C. Section 277).
• Security Bank Minnesota v. Commissioner, 98 T.C. 33 (1992), aff’d, 994 N.W.  2d 432 (8th Cir. 1993) (tax case affecting 40 Midwestern banks, which held that small cash-basis banks are not subject to the interest accrual rules under I.R.C. Section 1281).

Sales/Use Tax

• Sprint Spectrum LP, et al. vs. Commissioner of Revenue, 676 N.W.2d 656 (Minn. 2004) (Minn. Sales/Use Tax . . . telecommunications equipment, which produces telecommunication signals that have physical properties, is exempt from sales tax as capital equipment because it is used to manufacture tangible personal property).
• Bailey Nurseries v. Commissioner of Revenue, 2002 WL 1077273 (Minn. Tax), Docket No. 7255-R (May 16, 2002) (Minn. Sales/Use Tax . . . machinery and equipment for preparing soil, cultivating, harvesting and irrigating purposes, purchased by the taxpayer for use in its wholesale shrub nursery business were entitled to “farm machinery” tax rate).
• St. Paul Abrasives, Inc., et al. vs. Commissioner of Revenue, 1998 WL 726457 (Minn. Tax), Docket Nos. 6814-6817 (October 12, 1998) (Minn. Sales Tax . . . taxpayers, who ran an abrasives supply business, not liable for sales/use tax on purchase of incentive items they provided to customers in a trading stamp-like redemption program, since the purchases were for resale in other states where customers redeemed their incentive points).
• Northern States Power Company and United Power Association v. Commissioner, 571 N.W. 2d 573 (Minn. 1997) (Minnesota sales tax exemption for capital equipment who held to apply to electrical transformers located outside the power plant).
• Dahlberg Hearing Systems, Inc. v. Commissioner of Revenue, 546 N.W.2d 739 (Minn. 1996) (Minn. Use Tax . . . computers destined for business use in other states not subject to Minnesota use tax simply because software was loaded at company’s Minnesota headquarters).
• Northern X-Ray Company v. Tax Commissioner, 542 N.W.2d 733 (North Dakota 1996) (defense of North Dakota contractor's use tax claims).
• Copy Duplicating Products Inc. v. Commissioner of Revenue, Minn. Tax Court, Docket No. 6378 (July 10, 1995) (Minn. Sales Tax . . . copiers purchased by copier leasing company free of sales tax as sales for resale continued to be sold for resale when they were converted to coin-operated use because the “license to use” sold by the company to its coin-operation customers was also a resale).
• Burlington Northern Railroad Company v. Commissioner, 509 N.W. 2d 551 (Minn. 1993) (Minnesota sales tax attempted to be imposed on railroad rolling stock was held invalid under federal 4-R Act).

Minnesota Corporate Income Tax

• Amoco Corporation and Affiliates vs. Commissioner of Revenue, 658 N.W.2d 859 (Minn. 2003) (Minn. Corporate Income Tax . . . exploration and production operations of integrated oil company held not unitary with refining and marketing operations, under statutory definition of unitary business).
• Green Giant v. Commissioner of Revenue, 534 N.W.2d 710 (Minn. 1995) . . . (Minn. Corporate Income Tax . . . income assigned to corporation jointly owned by Green Giant and Alaskan Native Corporation should be excluded from the tax computation).

Minnesota Individual Income Tax

• Chapman v. Commissioner, 651 N.W. 2d 825 (Minn. 2002) (Minnesota alternative minimum tax provision that limited charitable contribution deductions to only Minnesota charities declared unconstitutional as discriminatory to interstate commerce).

Property Tax

• Cooperative Power Association v. Hennepin County, Minn. Tax Court, Docket Nos. 20070, 22041 and 24007 (March 20, 1996) (Minn. Property Tax . . . property tax valuation on headquarters of electric power cooperative reduced approx. 32%).
• Department Stores and Shopping Centers. We are the leading representative of department stores and major shopping center owners, developers and managers.
• Hotels and Motels. We have cutting edge experience with the complexities of hotel and motel properties as those issues continue to evolve in national circles, and our clients include a number of national flags.
• Office Buildings. We have unsurpassed experience in the representation of office properties in both the Minneapolis and St. Paul central business districts and in the suburban office markets.
• Environmentally Contaminated Properties. We are nationally recognized for our knowledge in the negotiation and trial of cases where the market value of the subject property is adversely affected by petroleum derivatives, asbestos, PCBs, landfills, and other forms of contaminants.
• Medical Office Buildings. We have developed considerable expertise in the valuation of medical office buildings, both in the Twin Cities Metropolitan Area and in Greater Minnesota.
• Restaurants. We have extensive experience with the difficult issues in valuing restaurant properties.
• Industrial and Manufacturing Properties. We have considerable experience with large and not-so-large industrial properties, including manufacturing, distribution, and headquarters facilities.
• Apartment Buildings. We represent regional and local owners and managers of apartment complexes and properties of all types.
• Office Warehouse and Office Showroom Facilities. We regularly represent the owners and managers of office warehouse and office showroom facilities.
• Developments Sites.
• Bank Properties. We have successfully represented major banks in trial and in negotiations involving branch bank and other bank properties.
• Grain Elevators.

Bios

Primary Attorneys

Steven Z. Kaplan, Of Counsel
Thomas R. Muck
Sue Ann Nelson
Steven J. Quam
Laura J. Wanger
Thomas R. Wilhelmy
Masha Yevzelman

Supporting Attorneys

Crystal M. Patterson